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Train firms launch legal battle
11:10am Monday 11th March 2013 in News
FOUR train companies have started legal proceedings against the Government after it cancelled the bidding process for the Great Western rail franchise and then refused to pay compensation.
Ministers ditched bids to run the franchise in January, saying it wanted to re-evaluate it following the high profile collapse of the West Coast mainline deal a few months before.
The current operator, FirstGroup, and Stagecoach, Arriva and National Express, have gone to court in an effort to get their money back. If they are successful, it could cost the Government £40m. There will be a stay in the legal proceedings until the end of March, giving both sides the chance to find a compromise.
The firms say they will not be compensated for what they see as the Government's mistakes. But ministers are compensating bidders who lost out on that defunct West Coast deal, which the firms see as unfair.
Each firm will have spent about £10m on the bidding process for the Great Western franchise, hiring teams of experts and lawyers to put together their submissions.
In January, transport secretary Patrick McLoughlin said: “In keeping with the relevant invitations to tender, which made clear that bidders are responsible for their own costs, the secretary of state does not believe it would be appropriate to reimburse bidders.”